Steve writes editorials for each issue of Forbes under the heading of “Fact and Comment.” A widely respected economic prognosticator, he is the only writer to have won the highly prestigious Crystal Owl Award four times. The prize was formerly given by U.S. Steel Corporation to the financial journalist whose economic forecasts for the coming year proved most accurate.

In both 1996 and 2000, Steve campaigned vigorously for the Republican nomination for the Presidency. Key to his platform were a flat tax, medical savings accounts, a new Social Security system for working Americans, parental choice of schools for their children, term limits and a strong national defense. Steve continues to energetically promote this agenda.

War With Iran Is Coming!

This article originally appeared in the Mar. 12, 2012 issue of Forbes magazine.

Twice in recent years Israel has been ready to strike Iran’s nuclear facilities, only to be dissuaded by strong U.S. pressure. But unless there’s a regime change in Iran soon, war will come. This is no state secret. U.S. Defense Secretary Leon Panetta reportedly told NATO ministers that he thought an attack would come within months. Inside the Pentagon Panetta has allegedly been warning officers that he thinks the Israelis will strike between June and August.

The Israelis fear Iran will soon enter what they call a “zone of immunity,” whereby the bulk of its critical nuclear assets will be buried so far underground that neither Israel nor the U.S. will be able to stop Tehran’s nuclear efforts from the air.

The Israelis have no faith that sanctions will deter Iran from its nuclear ambitions, even though its economy is indeed being hard hit by them. Fanatics that they are, the ayatollahs will see the economic crisis as an even greater incentive to develop their own bomb to help shore up their highly unpopular regime. After all, it’s worked for North Korea. Even more, these ­extremists think the bomb will make Iran a major power to reckon with, given all that oil in the Middle East.

The Iranians have been masters at using diplomatic negotiations to buy time for their nuclear program, so no one was surprised when they recently called for another round of talks. But this time the usually gullible Europeans can’t pretend that such a course would be successful.

The Israelis know they won’t be able to obliterate Iran’s nuclear effort the way they knocked out Iraq’s nuclear reactor in 1981 and Syria’s budding program in 2007. At best, they’ll set it back several years. But Jerusalem, knowing an existential threat when it sees one, feels it has no choice but to do what it must, imperfect as that may be.

What might actually trigger this conflict? A casus belli could be the assassination of an Israeli diplomat or an Iranian submarine striking a tanker in the Persian Gulf, thereby involving the U.S. as well. Or, as time passes, Israel might feel it has to initiate an attack. The Israelis know that the Obama Administration will be less likely to adamantly oppose an attack before the November elections than it would after them.

Would Iran provoke war? Some Iranian extremists believe that an Israeli strike would give Iran’s regime a surge in nationalistic popularity (but even if that happened, it would be as fleeting as the enthusiasm that greeted Argentina’s decision 30 years ago to seize the Falkland Islands from Britain).

Make no mistake, the coming conflict will have a major global impact. Even if the Iranians don’t try to close the Strait of Hormuz, the insurance rates for oil tankers are going to soar—as will the price of oil. The White House knows what this will do to our nascent economic recovery. Some ­experts speculate that oil could temporarily shoot as high as $300 a barrel.

Iran has no illusions as to what will happen if it tries to close the Persian Gulf. It tried to stop the flow of Iraqi, Kuwaiti and Saudi oil in 1987 as a way to strangle Iraq, with which it had been fighting a bloody war for almost seven years. The U.S. responded by “flagging” tankers carrying Arab oil, making it clear the U.S. Navy would defend them. When the Iranians took measures to interfere, the U.S. Navy made short shrift of Iran’s naval assets. So shaken was Ayatollah Khomeini by our countermeasures that he decided to quit the war with Iraq and leave Saddam Hussein in power. Nevertheless, you may see a repeat of the Tanker War. In the heat of battle the ayatollahs may not be able to contain themselves.

Iran will also attempt to have its agents carry out terrorist acts around the world, particularly in the U.S.

Israel will find itself embroiled in a horrific conflict. Hezbollah forces in Lebanon have more than 50,000 rockets and missiles. Jerusalem learned bitterly in its 2006 attack against Hezbollah how difficult that enemy is to defeat. Unlike the conscripted armies Israel had faced in past wars, the Hezbollah fanatics fought fiercely. Today they are stronger than ever. Northern Israel—perhaps even the whole country—will be hit hard from the air. Worse, the ­Israelis estimate that in the Gaza Strip, Syria and Iran itself there are another 150,000 missiles aimed at Israel.

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